Role of micro finance and small financing schemes on entrepreneurship and economic development in Jharkhand state

Abstract

Jharkhand, being the state furnished with abundant and enriching natural resources is pervaded mainly by the agrarian economy, marked with higher poverty rates and limited access to formal sources of credits or loans. Microfinance and small financing schemes emerge as a significant resolution to the problems of lack of funds for entrepreneurial activities of the state, developing its economy and society for the better. Microfinance along with diverse small finance schemes such as Jharkhand State Livelihood Promotion Society aid in assisting marginalized communities, minorities and women with adequate capital for starting various business activities. These schemes help in empowering minority communities of the state, by providing them access to entrepreneurship as well as ensure successful running of existing enterprises, thereby ensuring sustainable income generation and thus working towards poverty eradication. Microfinance has undoubtedly emerged as one of the most effective ways that supports people of Jharkhand, especially minorities and women in availing resources to conduct business, earlier limited and inaccessible. However, effective establishment of micro finance and small financing schemes do face various challenges in regard to interest rate, regulation etc. rising the need for research to develop ways to tackle these issues and develop further policies that help harness the potential of these schemes towards the economic and social development of the state. Study survey was conducted among 224 entrepreneurs to know the factors that determines the role of micro finance and small financing schemes on entrepreneurship and economic development in Jharkhand state. It is found that Financial Inclusion, Entrepreneurship Promotion, Poverty Alleviation and Economic Diversification and stability are the factors that determines the role of micro finance and small financing schemes on entrepreneurship and economic development in Jharkhand state.